April 25, 2020 (Gephardt Daily) — The Federal Trade Commission on Friday sent letters to 10 multi-level marketing companies, including three MLMs based in Utah, warning them about claims that their products are able to treat or prevent the coronavirus.
The Utah companies that were sent warnings are Tranont in Lehi, DoTERRA in Pleasant Grove, and Modere, Inc. in Springville.
“According to the U.S. Food and Drug Administration (FDA), there currently are no products that are scientifically proven to treat or prevent the virus,” the FTC said in a news release Friday.
In addition to citing false claims made about coronavirus prevention by the companies’ distributors, the FTC warned about false claims regarding the earnings people can make by working for these companies.
“MLMs and other companies that distribute their products through networks of distributors are responsible for the product and earnings claims those distributors are making,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “During this health and economic crisis, we are on the lookout for false income claims for work-at-home opportunities, in addition to spurious health claims that products can treat or prevent COVID-19.”
The letters cite specific examples of the claims the FTC says distributors have made, such as, “STAY SAFE!! MAKE YOUR IMMUNE SYSTEM STRONG!!! Standard coronavirus protection kit . #antiseptics and #immunity_support.”
Examples of earnings claims made by business participants or representatives include “a video with the description ,’… We have been so blessed as 7-figure earners and
we are here to help you, achieve your financial or time freedom goals.'”
In a letter to a second Utah company, the FTC cites as an example of a misleading claim: “Whether you want to make an extra $600 a month, an extra $10,000 a
month, or you want to make over $1 million a year, you can do that…”
Each letter also includes the following information:
It is unlawful under the FTC Act, 15 U.S.C. § 41 et seq., to advertise that a product can prevent, treat, or cure human disease unless you possess competent and reliable scientific evidence, including, when appropriate, well-controlled human clinical studies, substantiating that the claims are true at the time they are made. For COVID-19, no such study is currently known to exist for the products identified above. Thus, any coronavirus-related prevention or treatment claims regarding such products are not supported by competent and reliable scientific evidence. You must immediately cease making all such claims.
Additionally, representations about a business opportunity, including earnings claims,
violate Section 5 of the FTC Act, 15 U.S.C. § 41 et seq., if they are false, misleading, or
unsubstantiated and material to consumers. Express and implied earnings claims must be truthful and non-misleading to avoid being deceptive, which means that claims about the potential to achieve a wealthy lifestyle, career-level income, or significant income are false or misleading if business opportunity participants generally do not achieve such results. Even truthful testimonials from participants who do earn significant income or more will likely be misleading unless the advertising also makes clear the amount earned or lost by most participants.
The companies were advised to review these issues and cease making any false or misleading claims, and to make sure their distributors stop making such claims.
The companies were given 48 hours to email a reply to the FTC, “describing the specific actions you have taken to address the FTC’s concerns.”
